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Wage Increases to Remain Small, BNA Index Signals

Arlington, Va. (Jan. 14, 2010) — The rate of private sector wage growth likely will remain at or below historic low levels in the coming months, according to the final fourth quarter Wage Trend Indicator™ (WTI) released today by BNA, a leading publisher of specialized news and information.

The WTI fell to a record low 97.57 (second quarter 1976 = 100) from 98.00 in the third quarter, for the seventh consecutive quarterly decline. “Although the unemployment rate has stabilized recently at a high level, the prospects of substantial wage gains in 2010 for most workers look grim,” Kathryn Kobe, an economic consultant to BNA, said. “It probably will be months before we see solid job creation, which is what is needed to produce a tightening of labor market conditions,” Kobe said.

In the private sector as a whole, the rate of year-over-year wage increases is expected to remain at or below the 1.4 percent posted in the third quarter, according to the latest Department of Labor data. That was the smallest year-over-year gain on record and less than half the 2.9 percent increase for the same period in 2008.

Reflecting poor labor market conditions, six of the WTI’s seven components made negative contributions to the final fourth quarter index, while one was positive.

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